Manuela: This is The Download from Sounds Profitable, the most important news from this week and why it matters to people in the business of podcasting. I’m Manuela Bedoya.
Shreya: And I’m Shreya Sharma.
Manuela: The Download is brought to you by Magellan AI. Track the trends in spend, ad load, podcasts on YouTube, and more with Magellan AI’s advertising benchmark report for Q4, available now. You can find a link in the description or visit Magellan dot AI.
Shreya: This week: Podcasts are coming to YouTube Music, Digiday breaks down the Google antitrust case, Podnews publishes a deep dive on podcasting in Japan, and how marketers are looking at Q2.
Let’s get started.
Podcasts are coming to YouTube Music
Manuela: Since the release of the YouTube Podcasts webpage last year, there has been little in the way of concrete feature announcements from YouTube, leaving some skeptical of Google’s commitment. After all, podcasting has been burned by companies veering away from podcast support at the 11th hour.
Last Thursday, during the Hot Pod Summit at On Air Fest, YouTube Podcast Lead Kai Chuck took to announce YouTube is releasing a beta version of podcasting functionality for YouTube accounts, as well as adding podcasts to YouTube Music in the near future. A quote from Chuck, pulled from J. Clara Chan’s coverage:
“The message that I would hope folks are taking away is YouTube, at large, independent of YouTube Music, is looking to better support podcasters and [recognizes] that podcasting is generally an audio-first medium.”
Once implemented, YouTube Music listeners will likely have a comparable podcast listening experience to current offerings with Spotify and Apple. As reported on the official YouTube blog in August, YouTube Music has a subscriber base of around 80 million users split across YouTube Music and YouTube Premium. Not bad, but it pales in comparison to YouTube’s over two billion users.
According to Chuck, there are intentions to bridge the gap between the platforms. A quote from Chuck, pulled from Ariel Shapiro’s coverage:
“I don’t expect podcasts to only live on YouTube Music, that’s the only way that people consume podcasts on YouTube,” Chuk said. “We expect there to be kind of a back and forth between the two.”
Shapiro then says Google product lead for podcasting Steve McLendon gave an explanation of how the feature would ultimately work, describing seamlessly continuing a podcast episode that had been started on a desktop computer watching YouTube to an audio feed while driving home from work.
While not directly related to podcasting, another promising audio feature was announced for YouTube last week: multi-language audio tracks. Currently in beta and piloted by popular content creators like Jimmy “MrBeast” Donaldson, the feature will allow creators to upload alternate audio tracks to dub new and existing videos in different languages. If properly supported and implemented, this could have interesting implementations for podcasting in future.
In the February 21st issue of the Sounds Profitable newsletter, Bryan Barletta detailed several ways Google could win back trust from skeptical podcasters and show they’re committed to integrating with the industry. One way mentioned was a commitment to RSS ingestion and integration. While a step in the right direction, Chuck’s announcement didn’t completely deliver this. A quote from Chan’s presentation:
“Definitely support for RSS is something we are looking at. I would say, probably initially, we will leverage RSS to make it easier for podcasters to bring shows to YouTube. In terms of future plans, things like that, we’re sort of exploring what should our goal be.” So podcasts are coming to YouTube. Kind of. As Chuck said, the current vision for RSS integration is less integration and more an automatic import to bring the file into YouTube’s ecosystem. Promising steps are being made towards YouTube integrating into podcasting, instead of YouTube turning podcasters into YouTubers who occasionally upload audio elsewhere, but we’re not out of the woods yet.
WTF is going on with the Google antitrust case?
Shreya: Back in late January the Department of Justice filed a lawsuit against Google, alleging the search engine giant had created a monopoly in the ad tech market as well. The 155 page lawsuit argues Google has used a combination of ad tech tools like their ad exchange and publisher ad server to corner the market on programmatic ads. Last week Digiday senior media editor Tim Peterson published a brief piece collecting together the first three installments of a series of videos explaining the DoJ’s lawsuit, as well as the basic fundamentals of ad tech needed to understand the situation.
In general, the crux of the lawsuit centers around Google having a DSP in the form of Display & Video 360, an ad exchange platform in AdX, and a publisher ad server in Google Ad Manager. A tech stack that, if leveraged a certain way, would give preferential treatment to Google’s interests. A quote from the DoJ lawsuit:
“By allowing only its own publisher ad server effective access to important, unique Google Ads’ demand, Google could force publishers to adopt and remain on its publisher ad server; other ad servers could not compete to offer a similar product.”
The situation is further exacerbated by Google’s sheer size in the adtech industry. According to the lawsuit’s allegations, Google’s market share for ad servers jumped from 60% in 2008 to 90% in 2015. The DoJ cites a 2016 customer presentation in which Google stressed this 90% market share, describing their publisher ad server as the quote-unquote “defacto” choice. Even now, as alleged by the lawsuit, header bidding can’t escape Google’s first-look clauses. From the lawsuit:
“Critically, through dynamic allocation, Google’s ad exchange always received this “last
look” advantage, essentially a right to buy any impression as long as it had at least one advertiser willing to match the competing bid price from the header bidding auction.”
Podcasting as an industry has many paths in front of it right now. If we choose to go down a handful of current options available, we might find ourselves in the same situation Digital found themselves in with Google. Let’s hope podcasting doesn’t get to a point where even header bidding can’t break free of one company’s control.
It has been said before on The Download and it will be said again: independent third parties are vital for a healthy industry.
Japan: A Podcasting Deep Dive
Manuela: The first in a series of deep dives into different East and South-East Asian podcast markets by Guang Jin YEO was published last week on Podnews. A sequel to January’s Japan: a country overview, this deep dive examines the driving factors behind an industry-defining podcast (such as Serial), explores Japan’s existing podcast industry, and explores what could be a podcast category driver in Japan to the point of reaching a similar impact to Serial.
It’s an uphill battle in Japan, for sure. A snapshot of podcast listener statistics out of the internet population in several countries shows podcasting’s weekly reach is just four percent of the total population in a country with an 83% internet-connected population. For comparison, the same graph’s data for the US shows 26% weekly reach to the population.
Some significant barriers to entry do stand in the way of a thriving Japanese podcast industry. Popular commercial radio syndication apps like Radiko undercut the motivation of radio to repackage segments as podcasts, Japan has far stricter content copyright laws than the US, and most how-to guides built for educating new podcast listeners are only available in English. From the article:
“But is it all doom and gloom? Not exactly, TBS – Tokyo Broadcasting Station, the first radio broadcaster in Japan is planning to release a large number of new original podcast programs on all the mainstream podcast outlets – which means that they see value outside of Radiko. Covid also encouraged a surge of creators globally, including Japan which means more people are willing to tackle the complicated copyright laws and more people are willing to explain them to creators.”
Global podcasting is growing, and as this deep dive shows, some markets remain full of untapped potential with only a few speed bumps in the way of mainstream adoption.
Mixed outlook for Q2, marketers hold hope for second half
Shreya: This week Digiday’s Kristina Monllos published an article exploring marketer’s tempered expectations for the upcoming quarter, as well as hopes for Q3 and Q4.
“Marketers are spending, and there are signals that spending could pick up in the second half of the year with more new business pitches happening now, according to agency execs. But there’s still a “cautious optimism,” as one agency exec put it when asked to sum up marketers’ current mood. At the same time, spending is down compared to the second quarter of last year — agency execs say that it’s down roughly 10%, a smaller percentage than many had expected earlier in the year — and marketers are holding onto dollars longer and seeking more flexibility rather than longer-term commitments.”
As covered in similar stories over the past few weeks in The Download, the general tone of the industry is that brand building has taken a back seat to performance marketing. Stacey Stewart, U.S. Chief Marketplace Officer at UM, told Digiday the marketers are focusing on short-term planning and flexibility over signing long-term deals.
Creative agency Mekanism CEO Jason Harris reports some marketers have adopted a “keep calm and carry on” strategy by continuing to spend and accepting lower profits for higher revenues. Stewart’s comment about flexibility is backed up by Harris, who also reports having seen it bleed over into new business pitch practices. While new clients are focusing on taking baby steps with test projects, he also sees promising indications for the future. A quote from Harris in the article:
“Pitch activity tells me clients are planning the back half of the year to be busy,” said Harris. “I think this year will turn into a good year.”
2023 rolls onward. Q1 has developed into something far less terrifying than predicted four months ago, and the vast majority of us are still alive and kicking. Despite it all, it’s hard not to have hope for the rest of the year. It might not be the most stellar year on record, but signs point to good things.
Shreya: Finally, it’s time for our semi-regular roundup of articles we’re calling Quick Hits. These are articles that didn’t quite make the cut for today’s episode, but are still worth including in your weekend reading. This week:
The 2023 IAB Australian Audio State of the Nation Report released yesterday and is now available for download. Check it out now for the latest data from down under, including the finding that 78% of media agencies intend to increase investment in podcast advertising this year.
And in Sounds Profitable’s weekly series Data Decoded with Tom Webster, Tom looks at a graph from Podsights’ newest quarterly Benchmark report. Preroll ads now have higher conversion rates than midroll. What could that mean? Tom breaks it down in five minutes on the Sounds Profitable YouTube channel.
I know we went through today’s stories fast, so be sure to check out the links to every article mentioned, right in your podcast listening app, or on SoundsProfitable.com/TheDownload. And thank you for sticking with us as we bring you the top stories you might have missed from the past week. I’m Manuela Bedoya.
Shreya : And I’m Shreya Sharma. Our producers are Bryan Barletta, Gavin Gaddis, and Tom Webster. Special thanks to Art19 for hosting The Download. And thanks to you for joining us.